Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help solve. Question 5 Chevenne Companv produces a single product. It sold 15,000 units last year, with the following results: Sales $375300 Variable costs

image text in transcribedimage text in transcribed

Please help solve.

image text in transcribedimage text in transcribedimage text in transcribed
Question 5 Chevenne Companv produces a single product. It sold 15,000 units last year, with the following results: Sales $375300 Variable costs 225,000 Fixed posts 90,000 Income before taxes 60,000 Income taxes {45%} 2?,000 Afterhtax earnings $33,000 In an attempt to improve the company's product, Chevenne's managers are considering replacing a component part that costs $1.50 with a new and better part that costs $2.30 per unit during the coming 1year. A new machine would also be needed to increase plant capacity. The machine would cost $10,300 and have a useful life of six years, with no salvage value. The oompanv uses straight-line depreciation on all plant assets. What was Cheyenne Company's breakeven point in units last year? Quantity units How many units of product would Cheyenne Company have had to sell in the past year to earn $46,200 in after-tax earnings? Quantity units If Cheyenne Company holds the sales price constant and makes the suggested changes, how many units of product must be sold in the coming year to break even? ( Round answer to 0 decimal places, e.g. 125.) Quantity units If Cheyenne Company holds the sales price constant and makes the suggested changes, how many units of product will the company have to sell to make the same after-tax earnings as last year? ( Round answer to 0 decimal places, e.g. 125.) Quantity unitsIf Cheyenne Company wishes to maintain the same contribution margin ratio, what selling price per unit of product must it charge next year to cover the increased materials costs? (Round to 2 decimal places, e.g. 15.25.) Price $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles Volume 1

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

8th Canadian Edition

111950242X, 1-119-50242-5, 978-1119502425

More Books

Students also viewed these Accounting questions

Question

1. Describe three tools a receiving clerk uses frequently.

Answered: 1 week ago

Question

Excel caculation on cascade mental health clinic

Answered: 1 week ago